It looks like you're new here. If you want to get involved, click one of these buttons!
I think the Doubleline website does a good job of explaining how it works, but I wonder how many people did proper research on it.
© 2015 Mutual Fund Observer. All rights reserved.
Now, we cannot really expect fund to outperform VFINX and then also continue to outperform when the brown stuff hits the fan.
I'm not buying s***. However, I'm not selling this one for no other reason than I didn't expect it to hold up in bear market. I'm more pissed at FMI and Oakmark funds.
@Bitzer, go read other thread, DSEEX
maybe these thoughts will help
Oh well, when the results were in, it didn't meet my expectations, which may have been more about CAPE sounding like a great idea. And the secret bond sauce, how tantalizing it was. I wanted to think it was a great long term concept versus relying on managers picking stocks and holding cash, but that's not what the data says.
Glad you started the discussion again. I'm also curious how others see it now.
CAPE is a simple concept. That is explained. The bond-derivative part is not explained well at all, so investors have nothing but performance to go by and a leap of faith. From the start this fund was great. The past couple years when value has underperformed so did this fund. Now we know it won't hold up well when bonds are selling off. Now we know.
CAPE ytd = -24.5
DSENX ytd = -31.1
The bond sauce makes DSE_X more like holding CAPE plus some gogo Pimco fund, or even non-gogo Pimco funds. The fact that it 'added' 6.5% to the ytd loss, if my calcs are right, actually makes Gundlach's bond work look rather better than PONAX and PDVAX and FADMX, forget PCI and PDI.
So 'good until it wasn't' isn't the case, as I understand the phrase, which applies more to our favorite punchees Miller, Berkowitz, Heebner, et alia.
I like a few of the Doubleline managers and think that Jeff loves attention and is a good marketer and probably has too many funds. I have had good and bad luck with many profiled funds on here and most of them turn out to be average or below, which is unfortunately how this works.
The Int'l CAPE fund has done horribly since the beginning. I owned it for a year and bailed.
I guess we have now learned the the only bonds that hold up in a crash are Treasuries.
I'm pushing back here because you said that Doubleline does a good job explaining how this fund works. Based on that you say people didn't research the fund properly. I guess I take exception to that comment. DL does not explain the bond side, only that they use derivatives in that space. The bond side is not the low duration fund you point to. You may see that the bond side acts "similar" in return to low duration, but that is after the fact statement. No pre-buy research.
Also on performance per M*, they categorize this fund as LC blend. To that the fund has under-performed the past 1 month...98 percentile, YTD...96 pct, 1 year...90 pct and 3 year... 80 pct. All this with extra volatility.
The fund and the CAPE concept is very intriguing. I don't fault anyone for hanging on or even adding to because of that fact. But data does show it performing poorly in this bear environment. That's the important research to help understand what your buying, at least for me.
I believe @msf more than once in the past has attempted savvy descriptions or perhaps informed speculations of the ingredients of the bond sauce.
Again from memory, I think it looked like the bond portion was becoming more conservative. But I'm not sure I remember that correctly. All in all, what I was doing felt like Lord Rutherford shooting alpha particles at gold foil, except that the foil was transmutating over time.
maybe this was more just an explan or delving of what derivatives are in the first place and how they likely work in this instance, now working less well
I was simply addressing the comment that the fund is opaque. Its practices and use of derivatives seem rather transparent (IMHO moreso than many funds); its bond holdings and the equity index it is tracking are not.
DSEEX-First, managers invest in global bonds then, they look at 11 US stock sectors and select 5 undervalued sectors, then take 4 sectors out of 5 with the best momentum. They don't invest directly in the index but in a derivative that is similar to the index.
Basically, you get 200% investments for the price of 100%. You get real bonds + derivative of stock indexes.
To make even simpler, let's assume they invest in just one sector SPY and assume the bond portion makes 3-4% annually. It means, the performance will be SPY + 3-4% - (paying for derivatives).
long thread discussion, if anyone wants to get into the weeds of volatility and more (ah, those were the days):
@fundfan Yes, many of the profiled funds do underperform (again, it would be difficult to agree upon an appropriate benchmark). That's why I use my version of a core and explore portfolio (90% index funds and 10% funds that I learn about on boards such as this one).
I think my issue is the fund down a little more than than the s&p or large value and there seems to be the thought of something wrong with it when Mstar shows it is more volatile.
@Bitzer I agree with you but I am probably 50/50 or so not 90/10. I have been on the site since FundAlarm and I have gone through the list over the years and many funds are no longer around or sounded promising and just weren't. I guess just like the Spiva reports we are lucky to find any funds that consistently beat the benchmarks or at least do well on a risk adjusted basis. I started using mostly factor ETFs/Funds like DSEEX kind of is because of this.